Lessons From Libra, Grubhub Has the Munchies, and Money Well Spent?

Here’s What You Need To Know

This month we witnessed another Facebook public affairs challenge in the form of its digital currency, Libra. The new cryptocurrency promised to “reinvent money” and “transform the global economy,” yet it seems the social network seriously underestimated the headwinds it would face, and this week company executives made their way to Capitol Hill for high-profile hearings.

Unlike some of the other challenges that have plagued the company, Facebook’s Libra woes are a crisis of its own making that could have been anticipated by conducting due diligence on political and reputational risks before the launch of the new initiative. Companies have been increasingly turning to competitive intelligence for public affairs because they know that gaining an information advantage helps them successfully navigate such political and reputational challenges before they occur. Here’s what companies can do to avoid Libra’s failure to launch and achieve their objectives:

  • Begin By Assessing Political Risk: The moment Facebook announced Libra, it faced serious pushback from U.S. and European regulators and lawmakers. While the company appeared to be caught off-guard, it could have prepared for this scrutiny by assessing the political risk that Libra would face pre-launch from entities responsible for granting governmental permission, as well as the likely sources of outside advocacy and opposition on the regulatory stakes for the initiative. To do so properly requires that companies identify the full range of policymakers, stakeholders, and other key individuals and organizations that may be involved in the approval and execution process. Companies must also understand what these “influencers” have said or done in the past on similar projects in order to better predict and mitigate political risk. Assessing political risk before rolling out a new project can prevent wasted time, money, and embarrassment. 
  • Analyze The Range Of Stakeholders To Identify And Leverage Opportunities: Analyzing the stakeholders surrounding a project or initiative can become a force-multiplier for an organization, allowing it to focus on reaching out to constituencies so that its message can be heard by key decision makers. In Libra’s case, Facebook could have started by gaining the loyal support of prominent companies and proactively addressing their concerns before launch, so that their support for the project would remain steady in the face of regulatory scrutiny. Companies could also work to mobilize customers or users who support their products and could help shape public perception in support of a new initiative. However, being able to seize these opportunities in the first place requires first understanding where the interests of key stakeholders lie in relation to your company’s interests.  
  • Set Up A Monitoring Program To Keep Informed Of Trends And Developments: When crafting your launch strategy, standing up a monitoring program to keep informed of developments, changes in the state of play, and ongoing discussion about the new initiative can help your company anticipate and adapt to inevitable roadblocks. An effective monitoring program can identify public comments and actions that foreshadow challenges, so they can be addressed before major rollouts and before senior executives go before policymakers – whose approaches in hearings are often influenced by developments in the public arena, such as when Arizona Senator Kyrsten Sinema brought up a TechCrunch article on the risk of Libra being misused by “crooked developers.”
  • Be Prepared To Respond To Criticism And Strengthen Your Position In The Public Arena: As the discussion and debate evolves around a new initiative, companies must be able to respond to events as they develop so they can share messaging, conduct outreach, and deploy other resources to build goodwill. They also need to be prepared to quickly respond to false, misleading, and negative attacks before their impacts are felt in the public arena. Otherwise, your company’s initiative can be at the full mercy of events outside your control, with little to no public affairs infrastructure capable of mitigating negative impacts once a crisis begins.

While Facebook executives overseeing Libra were able to address some policymaker concerns on Capitol Hill this week, the company also notably did not answer other critical questions. The path forward for Libra remains uncertain, but it provides an instructive lesson for companies launching initiatives requiring policymaker and regulatory approvals. To avoid political and reputational challenges that can complicate your launch strategy, strengthen your public affairs efforts with an information advantage that can be leveraged to achieve your objectives. We know some smart folks who can help.

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